Income and taxes from a house property

Having any kind of property like it could be your own house, office, building, shop or any land like parking and etc. all these can be house property and you can generate your income from all of that. And all of these properties are taxable under the income from house and property as the government has never differentiated between commercial and residential property.


Whenever the owner or anyone else is using the property for the purpose of carrying out the business of any professional or freelancer Then the income will be consider as the income from business and it also have to mention into the income tax return under the head of income from business, and it the repair and maintenance have done of that than the taxpayer can show it under “business expenditure”.

House property which is taxable:-

Let out house property: – A let out property is something which is given to anybody who can use it for the purpose of carrying out the business on rent or given to somebody to can reside their on rent. These kinds of house property are taxable under income tax as the other income.

Inherited property:– A inherited property is carried out by the parents or the grandparents as the legacy so these properties are also consider as the taxable property.

Self occupied property:– basically the self occupied property is the property where the taxpayer have for their residential purpose and if they have other vacant house then that will be consider as income tax purpose. In the F.Y 2019-2020 if any taxpayer have more than one house then one of that would be consider as the resident house and rest all will consider as let out property and they have to pay tax on that. But 2019-2020 onward all of the taxpayer can have 2 houses as the residential house and other all will consider as let out. So the choice will be of taxpayer’s that which 2 houses they want to have as residential house.

How to calculate the income from house property?

Determine Gross annual value:- for the self occupied property it is zero but for the let out property it would be the annual rent income from the property.
Reduce the property tax:- when it comes to tax paid then government allow deduction on GAV of property.
Determine net annual value:- net annual value= gross annual value – property tax.
Reduce 30% as NAV of deduction: government allows deduction of the 30% on net annual value as deduction under section 24 of the income tax act. but there are no other expenses are allowed to be claimed as painting , repairing and etc.
Reduce house loan interest:- under section 24 of income tax the deduction are allowed for the interest also which is paid for house loan.

Now see how much income you have at the end and the same will be comes into the slab rate and will be taxed accordingly.

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